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The number of foreign companies active in India is declining

Foreign companies may be losing interest in India.

While more of them have registered in the country—up 11.4% since 2017—fewer are active compared to then, Business Standard reported today (Aug. 12). The newspaper cited the corporate affairs ministry’s data

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The Indian units of more than half the 516 foreign firms registered over the past five years are based in two states—Maharashtra and Delhi.

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Why are foreign companies pulling the plug on India?

Between 2014 and November 2021, up to 2,783 foreign companies left India, commerce and industry minister Piyush Goyal told parliament late last year. These include Metro AG, Holcim, Ford, Royal Bank of Scotland, Citibank, Harley-Davidson, among others.

While the ease of doing business in India is said to have improved over the past five years, several hurdles remain, dissuading foreign entrepreneurs.

“India’s struggle has been its inability to simplify regulations. Complex framework causes confusion and proves to be tedious for investors. However, simplification leads to exploitation and tax leakage. India needs to find a healthy balance that will be attractive to MNCs,” Neeraj Agarwala, a partner with Nangia Andersen, told the Deccan Herald newspaper.

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